On July 14 NAEGA Director of Operations Ryan Olson attended, as part of the USAEDC Attache Seminar, a breakout session on sanctions and embargos titled Complicated Partners: Opening New Markets – Iran, Burma, and Cuba. The session featured presentations from FAS personnel from Cuba, Burma and the United Arab Emirates. In addition, Office of Foreign Asset Control (OFAC) and Bureau of Industry and Security (BIS) personnel were on hand to answer sanctions and embargo related questions. As sanctions are being liberalized with Burma, Iran and Cuba, some sections of U.S. industry have an opportunity to access these markets for the first time in decades. However, significant barriers still remain and understanding this is vital to engaging in these new markets.
Burma
Since the loosening of sanctions that began in 2012, U.S. businesses can now engage in any form of trade and investment with Burma. However, U.S. persons are prohibited from engaging in any trade or commerce with individuals listed on the Specially Designated Nationals and Blocked Persons List (SDN List). In addition, U.S. persons may not engage in the trade of jade or derived products and jewelry. While general licenses from OFAC are now available for trade with Burma, and broad import bans no longer exist, domestic constraints still represent a challenge to trade with the country. These include poor rule of law, domestic financing requirements and poor agribusiness infrastructure.
Iran
Since the U.S. and Iran completed the Joint Comprehensive Plan of Action (nuclear deal), some sanctions related to Iran’s economy have been eased. However, sanctions relief under the nuclear deal was in no way meant to improve commercial or U.S. business relations with the Islamic Republic. Sanctions relief under the deal applies only to non-U.S. persons working outside U.S. jurisdictions. However, OFAC continues to offer general licenses for the export to Iran of agricultural commodities. Export of agricultural commodities to Iran, by U.S. or non-U.S. persons, does not trigger sanctions under U.S. law unless the transaction involves certain U.S.-designated persons such as Iran’s Islamic Revolutionary Guard Corps (IRGC) or a designated Iranian bank. In addition, financial transactions to facilitate these exports are allowed, with certain restrictions.
Cuba
The U.S. agricultural sector has been able to engage in the export of agricultural commodities to Cuba since the Trade Sanctions Reform and Export Enhancement Act of 2000. Under current sanctions, the U.S. persons can export agricultural commodities to Cuba that qualify as EAR99. However, financing for these transactions is still restricted. Agricultural transactions may only be paid by cash in advance or by a bank located in a third country as long as it is not organized under U.S. law. Despite its ongoing ability to trade with Cuba, the U.S. agricultural sector has also benefited from recently granted sanctions relief. Most notably, U.S. persons may now travel to Cuba to engage in “certain authorized export transactions” including the export of agricultural goods, and the approval of direct, non-chartered U.S. flights has increased accessibility to Cuban destinations.
For more information on U.S. sanction and embargo program, please visit the OFAC website, here.
